Omv Ag · VIE:OMV
Omv — OMV Aktiengesellschaft — Non-Deal Roadshow (July 2020)
68 slides from Omv's roadshow presentation, July 2020
Slide 1: OMV Capital Market Story
OMV CAPITAL MARKET STORY July 2020 OMV Aktiengesellschaft
Slide 2: Disclaimer
Disclaimer This presentation contains forward looking statements. Forward looking statements may be identified by the use of terms such as “outlook”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “target”, “objective”, “estimate”, “goal”, “may”, “will” and similar terms, or by their context.
Slide 3: OMV Capital Market Story
OMV Capital Market Story OMV at a glance Market and strategy 2015-2019 review: Active portfolio management towards returns and cash 2020: Acquisition of controlling interest in Borealis Financials, capital allocation priorities and management of current economic situation 3 | OMV Capital M
Slide 4: OMV – The energy for a better life
OMV – The energy for a better life Ready for a changing and volatile world ► HSSE – Top priority Safety first ► Aim for ZERO harm – NO losses Financial ► Integrated portfolio across the value chain stability ► Balanced regional footprint ► Become a digital leader Innovation & ► Provide solutions for
Slide 5: One integrated company along the value chain
One integrated company along the value chain Upstream DOWNSTREAM Downstream Gas Monomers and GAS Refining Sales channels polymers 5 core regions: CEE, Natural gas sales MEA, North Sea, OMV to increase its stake Top European ~2,100 retail sites in volumes of 137 TWh Russia and Asia-Pacific
Slide 6: Why invest in OMV
Why invest in OMV Prospective project pipeline in Upstream – focus on low-cost gas projects Growth in operating cash generation Top European refiner and strong position in Abu Dhabi – benefitting from demand growth in emerging markets thanks to Resilient cash flows internationalization of Downst
Slide 7: Multi-billion action plan to safeguard financial strength
Multi-billion action plan to safeguard financial strength in the current challenging environment Reduce organic investments by around 30% 1 to around EUR 1.7 bn in 2020 OMV is responding the 2 Cut costs by more than EUR 200 mn in 2020 current situation with targeted measures to safeguard the compa
Slide 8: OMV Capital Market Story
OMV Capital Market Story OMV at a glance Market and strategy 2015-2019 review: Active portfolio management towards returns and cash 2020: Acquisition of controlling interest in Borealis Financials, capital allocation priorities and management of current economic situation 8 | OMV Capital M
Slide 9: Growing world population drives demand for oil and gas products
Growing world population and improving living standards drive demand for oil and gas products World primary energy demand IEA World Energy Outlook 2019, bn toe Oil and gas will remain main 17.7 sources of primary energy in the 16.3 next decade 14.3 13.8 8.4 13.3 Natural gas is an important 7.5 O
Slide 10: Petrochemicals markets with strong growth perspectives
Petrochemicals markets with strong growth perspectives driven by economic growth and improving living standards Polyolefins 1 demand 2008 - 2028 Mt, CAGR ► Fast growing market: CAGR ~4% until 2028, above GDP growth +3.9% 256 ► Asia is the main driver of growth (CAGR ~5%) ► Growth triggered by econom
Slide 11: OMV Strategy 2025 in a nutshell
OMV Strategy 2025 presented at the Capital Markets Day in March 2018 in a nutshell Profitable growth Expand integrated portfolio ► Clean CCS Operating Result of ► Leverage on proven concept of ≥ EUR 5 bn in 2025 integration ► ROACE target ≥ 12% mid- and ► Significantly internationalize long-term Ups
Slide 12: Low-carbon future embedded in OMV Strategy 2025
The move towards a low-carbon future is embedded in the OMV Strategy 2025 More gas, More valuable Innovative less oil products, burn less technology We will increase the gas We will shift oil products We will allocate EUR 500 mn to share in our Upstream towards higher value and innovative ener
Slide 13: More gas – strong pipeline of gas projects
More gas – Strong pipeline of gas projects, driving OMV’s production towards the 600 kboe/d target Production, production split Kboed, % SapuraOMV Achimov 4A/5A SapuraOMV Nawara Neptun SARB and Umm Lulu ~35% 43% ~40% 52% 48% 348 57% 487 ~60% 450-470 1 >65% ~600 2017 2019 2020 2025 Gas Oi
Slide 14: Extending the value chain – Borealis controlling interest
Extending the value chain towards more valuable products – Acquisition of a controlling interest in Borealis OMV Upstream OMV Refining OMV Monomers Industries Borealis Monomers Borealis Polymers & Fertilizers Automotive Gas Consumer Energy Oil & Gas production Refining Polymers Healthcare Fertilizer
Slide 15: Plastic to Oil – ReOil technology
Plastic to Oil – OMV’s proprietary ReOil® technology Synthetic Refinery/ Converts used plastics under moderate crude oil petchem process pressure and normal refinery operating temperatures into synthetic crude oil Synthetic crude oil can be used as refinery feedstock to produce base materials or
Slide 16: Paris Agreement commitment and new emissions targets
OMV is committed to the goals of the Paris Climate Change Agreement – New, more ambitious emissions targets for 2025 SCOPE 1 – target 2025 (vs. 2010) SCOPE 3 – target 2025 (vs. 2010) Reduce the carbon intensity of operations 1 by Reduce the carbon intensity of product portfolio 2 by ≥30% (previously
Slide 17: OMV aims for net-zero
OMV aims for net-zero Scope 1 emissions by 2050 We will leave familiar paths to develop NET-ZERO fundamentally innovative low-emission technologies Scope 1 emissions We will push innovative approaches in our operations like carbon capture and storage/usage by 2050 as well as hydrogen We will s
Slide 18: OMV Capital Market Story
OMV Capital Market Story OMV at a glance Market and strategy 2015-2019 review: Active portfolio management towards returns and cash 2020: Acquisition of controlling interest in Borealis Financials, capital allocation priorities and management of current economic situation 18 | OMV Capital
Slide 19: Active portfolio management towards higher returns
Active portfolio management towards higher returns – Net acquisitions of EUR 3 bn Major divestments Major acquisitions Divested high cost and capex Established Russia as an Upstream core intensive OMV UK region Sold minority stake in regulated Established an integrated value chain in Gas Connect Aus
Slide 20: Successful strategy execution in Upstream
Successful strategy execution in Upstream Developed Asia-Pacific Expanded footprint in New Zealand by increasing stake in existing into core region producing assets Partnered with Sapura’s upstream business in Malaysia – Platform for further regional growth, capitalizing on growing Asian markets
Slide 21: Upstream – Improved portfolio, lower cost
Upstream – Improved portfolio, lower cost Production volume Production cost Kboe/d USD/boe +61% +61% (50)% -50% 487 13.2 Asia-Pacific 427 MEA 10.6 348 8.8 303 311 North Sea 7.0 6.6 Russia CEE 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 21 | OMV Capital Market Story, July 2020
Slide 22: Downstream – Consistent strong cash generator
Downstream – Consistent strong cash generator Clean CCS Operating Result Downstream Organic Free Cash Flow EUR bn EUR bn 1.8 0.1 1.6 1.7 1.5 1.5 0.2 0.2 0.2 Downstream Gas 0.1 0.1 1.4 1.4 0.2 1.2 0.6 0.6 0.6 0.6 1.1 Petrochemicals 0.6 0.8 0.9 0.9 0.8 0.8 Fuels 0.6 0.0 2015 2016 2017 2018 2019 OMV Pe
Slide 23: Internationalization of Downstream Oil – integrated position in UAE
Internationalization of Downstream Oil – Benefitting from an integrated position in UAE OMV’s integrated value chain in the United Arab Emirates enhances profitability, increases optionality and reduces volatility Upstream Refining & Trading Petrochemicals/Polymers Sarb and Umm 20.0% 15.0% ADNOC Ref
Slide 24: OMV Capital Market Story
OMV Capital Market Story OMV at a glance Market and strategy 2015-2019 review: Active portfolio management towards returns and cash 2020: Acquisition of controlling interest in Borealis Financials, capital allocation priorities and management of current economic situation 24 | OMV Capital
Slide 25: Agreement to increase share in Borealis to 75%
OMV signs transformative agreement for increasing its share in Borealis to 75% OMV acquires additional 39% share in Borealis, increasing its share to a controlling interest of 75% Purchase price of USD 4.68 bn Purchase price will be paid in two tranches, with USD 2.34 bn being due at closing,
Slide 26: Strategic rationale – repositioning in a low-carbon world
Strategic rationale – OMV repositions in a low-carbon world CEO Rainer Seele: “We will change our portfolio towards products that are demanded in a low-carbon world … ~60% of plastic production expected to be based on recycled … and, we want to become a feedstock by 2050 according to leading player
Slide 27: Borealis – Leading polymer producer
Borealis – Leading polymer producer with a focus on innovation Key financials Market presence Employees Sales 2019 2 Leading polyolefin producer Major operations in Austria, Employees excluding JV Belgium, France, Nordics and 5.7 mt Germany EUR 9.8 bn #8 globally European base ~6,900 3 Net profit 20
Slide 28: Borealis – Technology leader with innovative solutions
Borealis – Technology leader with innovative solutions Innovative company Borstar® 6,900 patents granted Borstar® is a multi-modal proprietary and 3,000 patents technology that yields special properties and pending as of 2019 structural benefits PE and PP with good processability for demanding a
Slide 29: Borealis – Strong profit contribution from specialties
Borealis – Strong profit contribution from specialties Total Sales by Specialty products in segment, 2019 Borealis margin, 2019 At-equity pro- Specialty products rata sales 1 17% EUR Fertilizers & 15% ~60% ohers 9.8 bn 53% Base 15% chemicals 2 Polyolefins 1 including 40% Borouge sales 2 Base chemica
Slide 30: Borealis has a global footprint
Borealis has a global footprint Stenungsund Porvoo • Ethylene: 380 kt • PE: 390 kt • Ethylene: 620 kt • Propylene: 230 kt • PP: 220 kt • Propylene: 230 kt • Aromatics & butadiene: 175 kt • Phenol & Acetone: 300 kt • PE: 770 kt Antwerp • Comp.: 42 kt Geleen • PE: 120 kt • Others: 120 kt • Comp: 90 kt
Slide 31: Borouge, the largest polyolefin site in the world
Borouge, the largest polyolefin site in the world – benefitting from competitive feedstock and access to Asian growth markets ► The world’s largest integrated polyolefins complex ► JV between ADNOC (60%) and Borealis (40%) established in 1998, first operations started in 2001 ► Following the start u
Slide 32: Well positioned for growth in cost-advantaged locations
Well positioned for growth in cost-advantaged locations Europe Americas Middle East Belgium – new PDH 1 plant in Kallo, Texas (US) – Baystar JV with Total Abu Dhabi – Borouge located in proximity to port of Antwerp ► 1,000 kt p.a ethane cracker; in ► New Borstar® PP plant at Borouge 3 ► Cost advanta
Slide 33: OMV to become #1 in ethylene and propylene capacity in Europe
OMV to become #1 in ethylene and propylene capacity in Europe Top ethylene & propylene capacities in Europe Mn t ► OMV’s global monomer capacity will increase by over 50% to 6.4 mn t OMV 2.0 2.0 0.7 4.7 ► Thereof European ethylene and DOW 4.4 propylene: 4.0 mn t Ineos 3.9 ► Thereof aromatics and but
Slide 34: OMV extends value chain into polymers
OMV extends value chain into polymers, immediately becoming one of the world’s leading producers Top 10 polyolefins capacities Globally, 2018 Mn t ► Extension of value chain provides a Sinopec 13.5 natural hedge against cyclicality Exxon 12.9 ► Integrated value chain allows margin optimization Lyond
Slide 35: OMV aims to become a significant player in circular economy
OMV aims to become a significant player in circular economy Total investments of up to EUR 1 bn for innovative sustainable solutions planned until 2025 & Design for recycling & Chemical recycling Waste collection mechanical recycling ► Co-founder of the project ► Technology leader within the ► ReOil
Slide 36: OMV Capital Market Story
OMV Capital Market Story OMV at a glance Market and strategy 2015-2019 review: Active portfolio management towards returns and cash 2020: Acquisition of controlling interest in Borealis Financials, capital allocation priorities and management of current economic situation 36 | OMV Capital
Slide 37: OMV to reach a new level of operating cash flow
OMV to reach a new level of operating cash flow Illustrative – OMV Operating Cash flow 5.4 excluding changes in net working capital Borealis EUR bn including 40% 1.4 4.3 dividends 3.9 4.2 from Borouge Downstream 3.2 3.0 excluding 1.7 Borealis Downstream dividends including 36% in Borealis 2.5 Upstre
Slide 38: Borealis – Highly cash generative operations
Borealis – Highly cash generative operations Operating cash flow 1 Borealis investments EUR bn (excluding leases) EUR bn 1.4 1.3 1.3 1.2 Dividends 1.0 from Borouge 0.5 0.5 Borealis AG operating 0.4 0.4 0.4 Growth cash flow Running business 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 1 excl. ch
Slide 39: Focus on disciplined organic investments
OMV stand alone perspective – Focus on disciplined organic investments Organic CAPEX EUR bn 2020 CAPEX reduced by around 30% to cope with 3.1 current situation CAPEX planning for 2020 2.0 - 2.5 reduced by around 30% from 2.3 EUR 2.4 bn to around EUR 1.7 bn in 2020 to cope with current 1.8 ~1.7 eco
Slide 40: Borealis – Cash outflows related to growth mostly in 2020/21
Borealis – Cash outflows related to growth mostly in 2020/21 Borealis organic Capex Borealis Organic Capex excluding leases and excluding Baystar JV Running business capex to remain EUR bn below EUR 500 mn ~1.0 Growth capex in 2020/21 mainly 2020 Resilience driven by PDH plant Program Acquis
Slide 41: Stringent cost discipline
Stringent cost discipline OPEX savings In EUR mn >600 Operational efficiency in both >460 >430 Upstream and Downstream Process optimization and >330 harmonization Capture economies of scale and >200 strictly manage overhead costs Leverage digitalization and optimize IT processes Procuremen
Slide 42: Healthy balance sheet despite major acquisitions and record dividends
OMV has a healthy balance sheet despite major acquisitions and record dividends Net debt excluding leases & gearing (net debt/equity) excluding leases EUR bn, % 26% Long-term gearing target 22% (net debt/equity) of ≤30% 21% excluding leases 19% 19% Q1/19 – closing of the acquisition of a 50% sta
Slide 43: Balanced maturity profile and strong liquidity position
Balanced maturity profile and strong liquidity position Maturity profile EUR bn End of June 2020 In April and June 2020 issued 1.5 OMV cash-position senior bonds, in particular for financing the Borealis deal 1 EUR 5.8 bn EUR 3.25 bn 1.0 End of June 2020 OMV Remaining OMV undrawn committed credit co
Slide 44: Multi-billion action plan to safeguard financial strength
Multi-billion action plan to safeguard financial strength Reduce organic investments by around 30% in 2020 1 OMV 2020 CAPEX reduced from EUR 2.4 bn to around EUR 1.7 bn Further optimization of combined business with Borealis in 2021/22 Cut costs by more than EUR 200 mn and realize synergies with
Slide 45: Borealis deal and divestment projects progressing well
Borealis deal and divestment projects progressing well Acquisition of controlling interest in Borealis Regulatory approvals on track Joint project to identify synergies underway Closing expected by year-end Divestment of share in Gas Connect Austria Binding offer received from VERBUND Ongo
Slide 46: Progressive dividend policy reconfirmed
Progressive dividend policy reconfirmed – Dividend proposal of EUR 1.75 for 2019 Dividend Per Share EUR 1.75 1.75 Progressive dividend policy: OMV aims to increase the dividend or at least maintain it at the 1.50 respective previous year’s level 1.20 On July 28, the OMV Executive Board decided 1
Slide 47: Appendix
Appendix 47 | OMV Capital Market Story, July 2020
Slide 48: Updated outlook 2020
Updated outlook 2020 2019 Outlook 2020 Brent oil price (USD/bbl) 64 40 Average realized gas price (EUR/MWh) 11.9 <10 (previously ~10) 450–470 Total hydrocarbon production (kboe/d) 487 (previously 440–470 1) OMV European indicator refining margin (USD/bbl) 4.4 ~3.0 (previously ~4.0) Ethylene/propylen
Slide 49: Macro environment – all indicators down significantly
Macro environment – all indicators down significantly Oil prices USD/bbl OMV indicator refining margin USD/bbl 69 70 62 63 6 5.5 5.0 4.9 60 66 50 5 59 61 50 4 3.2 40 47 30 3 2.3 30 Average Brent price 20 2 Average realized crude price 26 10 1 0 0 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q2/19 Q3/19 Q4/19 Q1/20
Slide 50: Clean CCS Operating Result impacted by lower prices and demand
Clean CCS Operating Result substantially impacted by lower oil and gas prices and reduced demand Clean CCS Operating Result Clean CCS net income attributable Clean CCS Earnings Per Share EUR mn to stockholders EUR Upstream Corporate & Other, Consolidation EUR mn Downstream 1,047 1.56 510 650 699 137
Slide 51: Sensitivities of the OMV Group results in 2020
Economic environment – Sensitivities of the OMV Group results in 2020 Annual impact excl. hedging Clean CCS Operating Result Operating cash flow in EUR mn Brent oil price (USD +1/bbl) +60 +25 Realized gas price (EUR +1/MWh) +140 +90 OMV indicator refining margin in Europe (USD +1/bbl) +110 +85 Ethyl
Slide 52: ESG Ratings – External recognition
ESG Ratings – External recognition of Best-in-Class ESG performance Member of Rated by "Leadership A–" rating in the climate change category. OMV is one of the top 14 companies in the global oil and gas sector. since 2016 since 2018 2019 Prime Status by ISS ESG, with B-score since 2018 since 2015 si
Slide 53: ESG Ratings – performance relative to peers
ESG Ratings – OMV’s performance relative to peers Relative rating vs industry peers top 10% top 10% top 5% top 12% SCORE 70 AAA B– 2 76 3 Environmental 78 6.3 C+ 2 73 Social 66 6.6 B– 2 79 Governance 67 1 6.2 B– 2 76 1 Governance is the sub-category of Economic dimension. Here Economic dimension sco
Slide 54: Upstream – Strengthened reserve base
Upstream – Strengthened reserve base 1P Reserves Reserve Replacement Rate Mn boe 3 years Ø RRR, % 1,332 166 1,270 160 49 128 Asia-Pacific 1,146 1,030 266 285 MEA 116 120 122 North Sea 232 229 Russia 70 602 569 CEE 2016 2017 2018 2019 2016 2017 2018 2019 54 | OMV Capital Market Story, July 2020
Slide 55: Upstream – Major projects
Upstream – Major projects Development & Execution Project Country Type Production Cum. production Peak production Working interest Operated FID primary start year mn boe kboe/d % year Nawara Tunisia Gas 2020 40-50 ~10 50.0 by OMV 2014 SARB/Umm Lulu UAE Oil 2018 450 ~43 20.0 no 2013 Ghasha Phase 1 UA
Slide 56: Downstream Oil Europe – Value Chain
Downstream Oil Europe – European Downstream Oil Value Chain 2019 figures Refinery Product supply and Petrochemical/ commercial/ Crude supply production logistics retail sales Purchase of other Purchase of Retail raw material 1.3 mn t 1 finished products 3.2 mn t 2 6.5 mn t 49% Captive market 3 Equit
Slide 57: Downstream Oil Europe – Favorable yield structure
Downstream Oil Europe – Favorable yield structure European integrated refinery yield Heavy fuel oil yield (%) 2019, % OMV vs European refineries 2019 13% LPG, naphtha (petrochemicals feedstock) 8% 17% Gasoline <1% Sulfur 50% Middle distillates 2% Heavy fuel oil 6% Bitumen, coke, other residue >1% Su
Slide 58: Downstream Oil Europe – Strong profit contribution
Downstream Oil Europe – Strong profit contribution Profitability turnaround in last 6 years Highly efficient retail stations AT average DE average Operating Result per filling station, EUR 1,000 1 Average throughput per station, mn liters 1 2 RO average OMV Group >180 >180 3.6 3.7 3.8 3.8 ~3.8 ~25%
Slide 59: ADNOC Refining – Key facts
ADNOC Refining – Key facts ► Refining capacity of 922 kbbl/d: ► Ruwais Refinery East: 420 kbbl/d ► Ruwais Refinery West: 417 kbbl/d ► Abu Dhabi Refinery: 85 kbbl/d Dubai ► Petrochemical production: 1.7 mn t p.a. Abu Dhabi ► Associated infrastructure: Ruwais site ► Advanced logistics networks, utilit
Slide 60: ADNOC Refining – Platform for further profitable growth
ADNOC Refining – Platform for further profitable growth SELF-FUNDED GROWTH Profitable long-term growth pipeline Integrate in petchem Increase feedstock value chain Detailed feasibility studies for future Operational excellence projects ongoing flexibility (eg. new refinery) Upgrade naphtha strea
Slide 61: Downstream Gas Value Chain
Downstream Gas – Downstream Gas Value Chain 2019 figures Gas supply Gas logistics Gas marketing sales Equity production in Romania 41 TWh Gas sales to third parties Equity production 137 TWh in Norway 26 TWh Sales in Europe (ex-Romania) 88 TWh Equity production Gas supply in Austria portfolio 7 TWh
Slide 62: Financing – Strong credit rating
Financing – Strong credit rating A3 A- Outlook negative Outlook negative March 16, 2020 March 13, 2019 62 | OMV Capital Market Story, July 2020
Slide 63: Financing – Successful financing activities
Financing – Successful financing activities Date of issue Bond Amount in EUR mn Coupon in % Maturity June 2020 Eurobond (XS2189614014) 750 0.00 fixed 16/06/2023 June 2020 Eurobond (XS2189613982) 750 0.75 fixed 16/06/2030 April 2020 Eurobond (XS2154347293) 500 1.50 fixed 09/04/2024 April 2020 Eurobon
Slide 64: Shareholders – Diversified international shareholder base
Shareholders – Diversified international shareholder base Shareholder structure 1 Geographical distribution of 0.4% 0.1% institutional investors 1 56.4% 7.4% Consortium 13% agreement – 31.5% 30% 4% ÖBAG & MPPH 5% 327.3 mn 5% 28.3% shares 5% 6% 22% 24.9% 10% 7.4% 43.0% Free float United States Austri
Slide 65: Corporate Governance – Two-tier Board structure
Corporate Governance – OMV has a two-tier Board structure Supervisory Board Two boards with distinctive roles: Executive Board (EB) responsible for managing the company and representing it vis à vis third parties Supervisory Board responsible for monitoring and guiding the EB Supervisory Boa
Slide 66: Corporate Governance – Experience, skills and diversity
Corporate Governance – Experience, skills and diversity of Supervisory Board Board Structure Analysis – OMV Benchmark Comparison, July 20191 OMV 2017 OMV 2019 Change Peers' average4 Peer's min Peer's max Governance System two tier two tier Number of Board Members 15 15 0 12 8 19 Number of non execut
Slide 67: Corporate Governance – Performance criteria for bonus plans
Corporate Governance – Clear performance criteria attached to bonus plans 2019 100% Financial targets Key elements Long Term Incentive Plan ► 50% Free ► 50% Relative Total Focus on long-term value generation Cash Flow2 Shareholder Return vs. Representative oil and gas Option to reduce payout sig
Slide 68: OMV Aktiengesellschaft
The energy ouv for a better life. O M V
OMV Aktiengesellschaft — Non-Deal Roadshow (July 2020) on 6ix